Second Quarter 2017 Earnings Results August 4, 2017 Information - PowerPoint PPT Presentation

SEMPRA ENERGY Second Quarter 2017 Earnings Results August 4, 2017

Information Regarding Forward-Looking Statements We make statements in this presentation that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon assumptions with respect to the future, involve risks and uncertainties, and are not guarantees of performance. These forward-looking statements represent our estimates and assumptions only as of the date of this presentation. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors. In this report, when we use words such as “believes,” “expects,” “anticipates,” “plans,” “estimates,” “projects,” “forecasts,” “contemplates,” “assumes,” “depends,” “should,” “could,” “would,” “will,” “confident,” “may,” “can,” “potential,” “possible,” “proposed,” “target,” “pursue,” “outlook,” “maintain,” or similar expressions, or when we discuss our guidance, strategy, plans, goals, opportunities, projections, initiatives, objectives or intentions, we are making forward-looking statements. Factors, among others, that could cause our actual results and future actions to differ materially from those described in forward-looking statements include actions and the timing of actions, including decisions, new regulations, and issuances of permits and other authorizations by the California Public Utilities Commission, U.S. Department of Energy, California Division of Oil, Gas, and Geothermal Resources, Federal Energy Regulatory Commission, U.S. Environmental Protection Agency, Pipeline and Hazardous Materials Safety Administration, Los Angeles County Department of Public Health, states, cities and counties, and other regulatory and governmental bodies in the United States and other countries in which we operate; the timing and success of business development efforts and construction projects, including risks in obtaining or maintaining permits and other authorizations on a timely basis, risks in completing construction projects on schedule and on budget, and risks in obtaining the consent and participation of partners; the resolution of civil and criminal litigation and regulatory investigations; deviations from regulatory precedent or practice that result in a reallocation of benefits or burdens among shareholders and ratepayers; modifications of settlements; delays in, or disallowance or denial of, regulatory agency authorizations to recover costs in rates from customers (including with respect to regulatory assets associated with the San Onofre Nuclear Generating Station facility and 2007 wildfires) or regulatory agency approval for projects required to enhance safety and reliability; the availability of electric power, natural gas and liquefied natural gas, and natural gas pipeline and storage capacity, including disruptions caused by failures in the transmission grid, moratoriums or limitations on the withdrawal or injection of natural gas from or into storage facilities, and equipment failures; changes in energy markets; volatility in commodity prices; moves to reduce or eliminate reliance on natural gas; the impact on the value of our investment in natural gas storage and related assets from low natural gas prices, low volatility of natural gas prices and the inability to procure favorable long-term contracts for storage services; risks posed by actions of third parties who control the operations of our investments, and risks that our partners or counterparties will be unable or unwilling to fulfill their contractual commitments; weather conditions, natural disasters, accidents, equipment failures, computer system outages, explosions, terrorist attacks and other events that disrupt our operations, damage our facilities and systems, cause the release of greenhouse gases, radioactive materials and harmful emissions, cause wildfires and subject us to third-party liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance (including costs in excess of applicable policy limits) or may be disputed by insurers; cybersecurity threats to the energy grid, storage and pipeline infrastructure, the information and systems used to operate our businesses and the confidentiality of our proprietary information and the personal information of our customers and employees; capital markets and economic conditions, including the availability of credit and the liquidity of our investments; and fluctuations in inflation, interest and currency exchange rates and our ability to effectively hedge the risk of such fluctuations; changes in the tax code as a result of potential federal tax reform, such as the elimination of the deduction for interest and non-deductibility of all, or a portion of, the cost of imported materials, equipment and commodities; changes in foreign and domestic trade policies and laws, including border tariffs, revisions to favorable international trade agreements, and changes that make our exports less competitive or otherwise restrict our ability to export; the ability to win competitively bid infrastructure projects against a number of strong and aggressive competitors; expropriation of assets by foreign governments and title and other property disputes; the impact on reliability of San Diego Gas & Electric Company’s (SDG&E) electric transmission and distribution system due to increased amount and variability of power supply from renewable energy sources; the impact on competitive customer rates due to the growth in distributed and local power generation and the corresponding decrease in demand for power delivered through SDG&E’s electric transmission and distribution system and from possible departing retail load resulting from customers transferring to Direct Access and Community Choice Aggregation or other forms of distributed and local power generation and the potential risk of nonrecovery for stranded assets and contractual obligations; and other uncertainties, some of which may be difficult to predict and are beyond our control. These forward-looking statements speak only as of August 4, 2017, and the company undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. These risks and uncertainties are further discussed in the reports that Sempra Energy has filed with the Securities and Exchange Commission. These reports are available through the EDGAR system free-of-charge on the SEC’s website, www.sec.gov, and on the company’s website at www.sempra.com. 2

Table of Contents  Executive Summary  Cameron LNG Trains 1-3 Update  Second Quarter 2017 Financial Results  Second Quarter 2017 Key Drivers  Capture Opportunities  Positive Regulatory Outcomes & Projects  Earnings Guidance  Summary  Appendices 3

Executive Summary (1) per share  Reporting strong second quarter 2017 adjusted earnings of $1.10 (1) per share compared to second quarter 2016 of $0.79  Continuing to focus on near-term execution • Significant progress on new projects with over $1B added or filed for at CPUC since our 2017 Analyst Conference • Obtained 2 positive regulatory outcomes at our California utilities Final approval of 2-year Cost of Capital extension  Authorization to increase the amount of gas stored at Aliso Canyon  (2) per share, up  Increasing 2017 adjusted earnings guidance to $5.00 to $5.30 from $4.85 to $5.25 per share  Affirming 2018 earnings guidance of $5.30 to $5.80 per share, on expected strong operational performance completely offsetting no Cameron earnings in 2018 (see following slides for Cameron LNG Trains 1-3 update) 1) Sempra Energy Adjusted Earnings-Per-Share (EPS) is a non-GAAP financial measure. Q2-2017 GAAP EPS and Q2-2016 GAAP EPS were $1.03 and $0.06, respectively. See appendix for information regarding non-GAAP financial measures and descriptions of 4 adjustments. 2) Sempra Energy 2017 Adjusted EPS guidance is a non-GAAP financial measure. 2017 GAAP EPS guidance range is $4.95 - $5.25. See appendix for information regarding non-GAAP financial measures and descriptions of adjustments.

Cameron LNG Trains 1-3 Update (1)  It is reasonable to expect that Train 1 could be delayed into 2019 with Trains 2 and 3 following throughout 2019. This is based on several factors: • An updated schedule from the contractor • Cameron’s own review of the schedule, and • The inherent risks in constructing and testing these types of facilities  Delay is disappointing, but no material economic impact over the life of the project is expected due to strong risk mitigation provisions in Cameron’s contracts  Revised our 2018 financial plan to assume no earnings from Cameron in 2018; expected strength of our other businesses allows us to affirm our 2018 guidance range  Sempra’s 2020 earnings from Cameron still expected to be $300M - $350M 1) The ability to successfully complete major construction projects, including the Cameron LNG facility currently under construction, is subject to a number of risks and uncertainties. Please refer to the “Risk Factors” section of our most 5 recent Annual Report on Form 10-K and the “Factors Influencing Future Performance” section of our most recent Quarterly Report on Form 10-Q for a description of the risks and other factors associated with this opportunity.